Shares across Europe’s biggest airline plunge after EasyJet warns of impact of a price war

Shares across Europe’s biggest carriers plunged yesterday after EasyJet warned of the impact of a price war.

EasyJet dropped 5.9 per cent, British Airways owner IAG plunged 3.9 per cent and Lufthansa 8.6 per cent after EasyJet said it expects revenue per seat – a measure of fares – to fall by 2 per cent in the six months to September.

Air France and Air Berlin shares also dropped by 8.3 per cent and 2.2 per cent respectively.

Up in the air: Like most airlines, low fuel prices have seen EasyJet raise capacity, driving down fares for passengers

Like most airlines, low fuel prices have seen EasyJet raise capacity, driving down fares for passengers.

But while the airline raised its profit forecast to a range of £380m to £420m yesterday – above the analyst consensus of £375m – outgoing chief executive Dame Carolyn McCall, 55, said the extra capacity put pressure on yields.